USDA Bi-Weekly International Meat, Poultry & Egg Review

USDA Bi-Weekly International Meat, Poultry & Egg Review - 29 May 2015

International Trade Highlights:

The Food and Agriculture Organization (FAO) of the United Nations recently issued its bi-annual Food Outlook report. According to the FAO, during 2015 world meat production is forecast to increase 1.3 percent over 2014 to 318.7 MMT. The largest increase is expected in China, the EU, U.S. and Brazil. The pig meat sector is forecast to drive the global growth, with only modest gains in bovine and ovine production. World beef production is predicted to total 67.9 MMT, which is a little higher than 2014. In South America, cattle availabilities and slaughter have been rising, particularly in Brazil, continuing a trend from last year. Brazil, the second largest producer after the U.S., is expected to account for most of the area’s growth as the cattle herd is in expansion due to improved productivity and genetics. Additionally, higher prices on the export market have encouraged the use of feed to maintain cattle weights during the dry season. In Argentina, government export restrictions have increasingly fixated the industry on internal demand, which absorbs over 90.0 percent of production. Strong growth is expected from Paraguay and Uruguay, spurred by international demand and sustained cattle prices and is supported by and expanding herd and productivity increases. Beef production in India, the sixth largest beef producer, is expected to continue to expand its industry. In the U.S., the world’s largest beef producer is anticipated to incur a further, although smaller, decline as a result of calves being retained for herd expansion. This should be somewhat offset by higher average slaughter weights, supported by lower feed costs. Output could decline by 2.3 percent to 10.9 MMT, its lowest level since 1994. In Australia, beef production is expected to decline by 7.1 percent as the after effects of drought impact production. Beef production in New Zealand is expected to be higher, as a result of drought and lower milk payouts to farmers, who are highly dependent on the dairy sector which provides 80.0 percent of the total supply. During 2015, world pork production is forecast to total 119.4 MMT, 1.9 percent more than 2014 aided by lower feed costs. China’s pork production is expected to increase by 1.2 percent to 57.8 MMT due to strong consumer demand and government support policies. China accounts for almost 60.0 percent of the world’s pork production. Brazil is set to increase output, stimulated by reduced feed costs. Pork production in the EU is pegged to continue expansion, and as a result the year-end breeding sow herd increased for the first time in several years. In the U.S., pork production is projected to rise as recovery from the effects of porcine epidemic diarrhea (PED) continues. After stagnating in 2014, world sheep and goat meat production during 2015 is predicted to increase slightly to 14.0 MMT. In Oceania, drought imposed herd reduction and subsequent rebuilding are anticipated to constrain production output. During 2015, world meat trade is expected to increase 1.7 percent over 2014 to 31.2 MMT, a significant slowdown from the 3.1 percent registered last year. World beef trade is forecast at 9.8 MMT, 1.9 percent greater than 2014. Supply limitations are forecast to be the principal factor behind the slowdown, and the growth in import demand may slacken as well. China is expected to see a significant increase, although not to the same degree as the previous three years. Total imports could reach 12.7 percent over a year ago placing China as the main world market for beef, with 1.3 MMT. Imports by South Korea are also forecast to increase, while purchases by Japan may fall. Imports by the U.S. and Canada may decline. Russia’s devaluation of the rouble, combined with increased domestic production are expected to result in a fall in purchases. Much of the 2015 anticipated expansion in trade is projected to be met by India and Brazil. Increased exports are forecast for New Zealand growing from drought related herd reduction and a reduced rate of retention within the dairy herd caused by lower milk payouts. Conversely, Australia and the U.S. are expected to curb exports due to reduced production. Pork exports are expected to recover by 1.6 percent to 7.1 MMT. Expanding production in the main exporting countries, including the U.S., the EU and Canada, is anticipated to be the main driver behind export growth. However, the EU experienced a fall in exports due to an import ban by Russia, causing an increased supply into the domestic market and a substantial drop in prices. In February, the European Commission opened a private storage aid to assist price recovery and is anticipated to help trade growth. China, Mexico, South Korea and Australia are forecast to increase pork exports. During 2015, sheep and goat meat trade is forecast to fall 8.5 percent from 2014 to 940,000 MT. Australia and New Zealand account for nearly 85.0 percent of the exports. Trade is set to fall as a result of restocking in both countries. Per capita meat consumption during 2015 is forecast at 43.4 KG, down slightly from 2014. The complete food outlook report can be found on the FAO website at http://www.fao.org/WAICENT/faoinfo/economic/giews/english/fo/index.htm.

Poultry Production

World meat production is expected to increase 1.3% or 4 million tons to 318.7 million tons in 2015. The largest increases are projected to come from China, the EU, the US, and Brazil. Pig meat is expected to lead the global meat increases followed by poultry meat with only modest increases in bovine and ovine meat. World poultry production is forecast to see limited expansion in 2015 at 1.4% to reach 111.8 million tons unlike the annual 3% growth rate over the last decade. Cheaper feed prices have supported increases in many countries.

Poultry production in China is forecast to be unchanged in 2015 at 18.5 million tons as it continues to battle consumer concerns and associated impacts on demand related to avian influenza. The largest poultry meat producer in the world, the US, is projected to increase 0.8% to 20.7 million tons in 2015. Other major producing countries such as the EU, Brazil, Russia, Mexico, India, Iran, and Turkey are also predicted to see production gains.

Poultry Trade

Meat trade worldwide is projected to increase at a moderate rate of 1.7% to reach 31.2 million tons in 2015, a slowdown from 2014’s rate of 3.1%. Trade is forecast to increase for bovine, pig meat, and poultry meat; whereas trade declines are projected for ovine meat. With 40% of total meat trade, poultry is the leading meat traded followed by bovine, pig meat, and ovine meat respectively. World poultry trade is expected to gain only 2.6% in 2015 to reach 13.1 million tons. Despite realizing an increase of 55% over the last decade, world poultry trade has slowed since 2012 due to production expansions in importing countries reducing the need for imports and ongoing outbreaks of highly pathogenic avian influenza (HPAI) in the US (since January 2015) resulting in numerous import suspensions, pending the containment and eradication of the disease.

Poultry meat imports from China and Japan, the 2 largest poultry meat importers in the world, are forecast to be generally unchanged in 2015. Whereas imports to Mexico, Saudi Arabia, the EU, and Vietnam are expected to either remain steady or increase. Russia is projected to continue reducing its poultry meat imports in 2015 at rate of 12% attributed to sufficient domestic production and the August 2014 import ban on specific countries, which accounted for 75% of Russia’s total poultry meat imports in 2013. Imports of poultry meat to Africa are projected to rise 6.7% with increases from Angola and Benin due to income growth strengthening demand. Imports to South Africa are also expected to grow 1% in 2015.

Brazil, the US, and the EU are the 3 largest poultry exporters in the world accounting for almost 75% of total global poultry exports. Yet these leading exporters have seen limited growth in recent years. However changes are expected in 2015 as Brazil will benefit from the ongoing HPAI situation and related trade restrictions devastating US poultry meat exports and the increased opportunities in Russia resulting from the August 2014 ban. US poultry exports are projected to suffer and possibly deteriorate due to the effects of the HPAI related trade restrictions; though the severity of the decrease depends on how long it takes to contain and eradicate the disease. Thailand and Turkey are forecast to see expansions in poultry exports. Despite increases over the years and recent efforts to expand trade (China, Chile, South Africa, and Russia), Argentina is also projected to see declines in 2015 mostly as a result of declines to its primary market, Venezuela in 2014.

Pacific Rim:

The Korea International Trade Association (KITA) recently issued April 2015 beef and pork import data for South Korea. According to the data, during April, South Korea imported 21,549 MT of beef. This was down 8.8 percent from the previous month and was down 11.9 percent from April 2014. More specifically, frozen beef imports totaled 18,129 MT, which comprised 84.1 percent of the total. Fresh, chilled beef imports totaled 3,420 MT. During April, South Korea imported 12,356 MT of beef from Australia, which was 13.7 percent less than March and was 5.2 percent less than April 2014. Total year-to-date beef imports from Australia were 2.7 percent greater than last year, amounting to 52,211 MT. Australia was the main beef import market for South Korea with 56.9 percent of the total. South Korea’s beef imports from the U.S. during April equaled 7,117 MT. This was up 4.5 percent over the previous month but was down 21.2 percent from April 2014. Year-to-date beef imports from the U.S. were 13.7 percent less than a year ago, totaling 30,881 MT. During April, South Korea’s beef imports from New Zealand fell 16.9 percent from the previous month to 1,761 MT. Also, this was down 20.1 percent from April 2014. Year-to-date beef imports from New Zealand totaled 7,134 MT, 11.5 percent lower than last year. Overall, South Korea’s total year-to-date beef imports equaled 91,750 MT, which was 3.9 percent below the same period a year ago. Meanwhile, South Korea’s pork imports during April fell 4.3 percent from March but rose 24.3 percent over April 2014 to 39,324 MT. Pork imports from the U.S. during April equaled 12,237 MT, which was 8.5 percent lower than the previous month but was 2.4 percent higher than April 2014. Total year-to-date pork imports from the U.S. were 3.7 percent above last year, amounting to 44,982 MT. The U.S. was the main supplier of pork to South Korea with 29.5 percent of the total imports. During April, South Korea imported 6,971 MT of pork from Germany. This was down slightly from the previous month but was up 24.5 percent over April 2014. Year-to-date pork imports from Germany totaled 27,332 MT, which was 59.8 percent greater than a year ago. South Korea’s pork imports from Canada during April rose almost 1.0 percent from the previous month to 3,918 MT. Also, this was up 66.7 percent over April 2014. Year-to-date pork imports from Canada totaled 14,628 MT, which was up 31.1 percent from last year. Overall, South Korea’s total year-to-date pork imports equaled 152,723 MT, 30.3 percent above the corresponding period a year ago. To obtain further data on South Korea’s trade, go to the KITA website at http://www.kita.org/.

North America:

On May 22, the USDA National Agricultural Statistics Service (NASS) released its monthly Cold Storage report. According to the report, as of April 30, 2015, beef in U.S. cold storage facilities totaled 476.7 million pounds, which was 5.9 percent more than last year and was 18.5 percent more than the five year average. Specifically, boneless beef in cold storage was up 21.3 percent over a year ago, amounting to 436.8 million pounds. The volume of beef cuts in cold storage was 5.5 percent lower than a year ago, totaling 39.9 million pounds. Meanwhile, pork in cold storage at the end of April equaled 699.6 million pounds. This was up 16.4 percent over last year and was up 19.8 percent over the five year average. The volume of hams in storage equaled 135.6 million pounds. This was 65.8 percent more than a year ago. Pork bellies in cold storage totaled 70.4 million pounds, which was 15.8 percent lower than last year. The volume of loins in storage was 2.9 percent less than last year, amounting to 44.6 million pounds. Pork ribs in cold storage totaled 113.8 million pounds, 1.8 percent lower than a year ago. Pork butts in cold storage equaled 25.2 million pounds, which was 27.6 percent more than last year. The volume of trimmings in cold storage increased 52.4 percent from last year to 64.1 million pounds. Pork variety meats in storage equaled 47.2 million pounds, 25.0 percent more than a year ago. Veal in U.S. cold storage facilities totaled 6.72 million pounds, 109.3 percent more than a year ago. Lamb and mutton in storage totaled 36.7 million pounds, which was up 38.3 percent over last year. To obtain the complete report, visit the NASS website at http://www.nass.usda.gov/.

On May 22, the USDA National Agricultural Statistics Service (NASS) released its monthly Cattle on Feed report. According to the data, on May 1, 2015, cattle and calves on feed for the U.S. slaughter market for feedlots with a capacity of 1,000 or more head totaled 10.64 million head. This was up nearly 1.0 percent over one year ago but was down 1.1 percent from two years ago. During April, 1.55 million head of cattle were placed on feed, which was 4.6 percent lower than one year ago and was 10.0 percent lower than two years ago. More specifically, placements of feeder cattle weighing less than 600 pounds equaled 320,000 head, 15.8 percent less than last year. Placements weighing 600 to 699 pounds were down 4.0 percent from a year ago, amounting to 240,000 head. Placements weighing 700 to 799 pounds totaled 348,000 head, which was 11.5 percent lower than last year. Finally, placements of feeder cattle weighing more than 800 pounds were 6.7 percent more than a year ago, totaling 640,000 head. In the meantime, during April, U.S. fed cattle marketings totaled 1.64 million head. This was 7.8 percent less than one year ago and was 9.7 percent less than two years ago. Also, this was the lowest marketings for April since the series began in 1996. The complete report is available on the NASS website at http://www.nass.usda.gov/.

According to data released by Agriculture and Agri-Food Canada, as of May 16, 2015 Canada’s slaughter at Federally Inspected Packing Plants, cattle slaughter totaled 941,391 head. This was 8.7 percent lower than one year ago and was 5.1 percent lower than two years ago. During the same time period, Canada’s calf slaughter was 6.4 percent less than a year ago and was 8.2 percent less than two years ago, totaling 75,060 head. Meanwhile, Canada’s lamb and sheep slaughter totaled 63,565 head, which was down 2.7 percent from a year ago and was down 2.8 from two years ago. During the same time period, Canada’s hog slaughter equaled 7.75 million head. This was 2.2 percent greater than last year and was nearly unchanged from two years ago.

Recently, CanFax released Canada’s current cattle on feed numbers for terminal feedlots with 1,000 or more head in the provinces of Alberta and Saskatchewan. According to the data, on May 1, 2015, Canada’s total cattle on feed equaled 844,157 head. This was 12.1 percent lower than one year ago and was 12.1 percent lower than the five year average. During April, 101,968 head of cattle were placed on feed, which was 20.2 percent less than one year ago. Also, this was 23.9 percent less than the five year average. Steers placed on feed totaled 63,521 head, which accounted for 62.3 percent of the total. Heifers placed on feed totaled 38,447 head. More specifically, placements of feeder cattle weighing less than 600 pounds were 59.4 percent less than last year, totaling 3,064 head. Placements weighing 600 to 699 pounds equaled 8,267 head, 23.4 percent less than a year ago. Feeder cattle placements weighing 700 to 799 pounds were 25.6 percent lower than a year ago, amounting to 20,692 head. Finally, placements of feeder cattle weighing more than 800 pounds equaled 69,945 head, which was 14.4 percent less than last year. In the meantime, Canada’s fed cattle marketings equaled 117,412 head, which was 13.8 percent less than one year ago and was 11.4 percent less than the five year average. To view the complete report, go to the CanFax website at http://www.canfax.ca/.

Oceania:

The Ministry for Primary Industries (MPI) recently issued March 2015 cattle and lamb slaughter statistics for New Zealand. According to the data, at the end of March 2015, New Zealand cattle totaled 878,058 head, which was 20.4 percent more than then previous quarter and 10.0 percent more than the same period a year ago. Calves and vealer slaughter totaled 2,849 head, which was down 98.2 percent from the previous quarter but was up 17.8 percent over a year ago. During the first half of the year, October through March, New Zealand cattle, calves and vealer slaughter equaled 1.77 million head, which was 10.4 percent higher than the previous year and was 7.3 percent higher than two years ago. Meanwhile, at the end of March 2015, New Zealand sheep totaled 10.13 million head, which was 70.6 percent higher than the previous quarter but was 2.1 percent lower than the same period a year ago. Lamb slaughter totaled 8.23 million head, which was 74.0 percent more than the previous quarter but was slightly less than the same period a year ago. During the first half of the year, New Zealand sheep and lambs slaughter equaled 29.02 million head, which was down nearly 1.0 percent from a year ago and was down 2.7 percent from two years ago. To obtain further data on New Zealand’s trade, go to the MPI website at http://www.mpi.govt.nz/.

The Australian Lot Feeders’ Association (ALFA) and Meat & Livestock Australia (MLA) recently issued the results of Australia’s first quarter cattle on feed survey. According to the numbers, Australia’s cattle on feed on March 31, 2015 totaled 959,141 head. This was down slightly from the previous quarter but was up 9.8 percent over a year ago, as a result of ongoing dry conditions in many areas. Also small declines in feedlot cattle numbers in large states of Queensland and New South Wales were largely offset by increases in South Australia and Western Australia. The majority of Australia’s cattle on feed were in the state of Queensland with 519,248 head, which comprised 54.1 percent of the total. This was down slightly from the previous quarter. Combined, Queensland and New South Wales had 86.3 percent of the total cattle on feed in Australia, or 827,522 head. During the first quarter of 2015, Australia’s feedlot capacity totaled 1,146,995 head. This was slightly higher than the previous quarter and was 3.5 percent more than a year ago. Queensland had the largest feedlot capacity with 614,786 head, which accounted for 53.6 percent of the total. Combined, Queensland and New South Wales had a feedlot capacity of 980,269 head, which accounted for 85.5 percent of the total. Capacity utilization maintained the record level at 84 percent, unchanged from the previous quarter and compared to 79 percent a year ago. During the first quarter, Australia’s cattle marketings equaled 725,211 head. This was nearly 1.0 percent lower than the previous quarter but was 13.0 percent higher than a year ago. The complete report can be found on the ALFA website at http://www.feedlots.com.au

According to data released by the Meat and Livestock Australia, as of May 16, 2015 Australia’s cattle slaughter totaled 3.13 million head. This was 4.8 percent greater than one year ago and was 20.1 percent greater than two years ago. Queensland had 1.46 million head, which comprised 46.6 percent of the total. Queensland and New South Wales had 71.8 percent of the total cattle slaughtered. During the same time period, Australia’s calf slaughter equaled 158,673 head. This was 12.3 percent less than a year ago and was 6.0 percent less than two years ago. Victoria had 47.4 percent of the total, or 75,180 head. Victoria and New South Wales had 88.0 percent of the total calves slaughtered. Meanwhile, as of May 16, 2015 Australia’s lamb slaughter totaled 7.17 million head, which was up 4.0 percent over a year ago and was up 13.0 over two years ago. Victoria had 3.50 million head, which accounted for 48.9 percent of the total. Victoria and New South Wales had 74.2 percent of the total lambs slaughtered. During the same time period, Australia’s sheep slaughter equaled 2.49 million head. This was 24.6 percent lower than last year and was 13.6 percent lower than two years ago. Victoria had 39.0 percent of the total, or 969,407 head. Victoria and New South Wales accounted for 68.3 percent of the total sheep slaughtered.